Twitter Buys 900 IBM Patents in Cross-License Agreement

Twitter Buys 900 IBM Patents in Cross-License Agreement

IBM and Twitter announced that in December Twitter acquired more than 900 patents from IBM and that the companies entered into a patent cross-license agreement.

Financial terms of the agreement were not disclosed. However, the agreement demonstrates that IBM's vast portfolio of more than 41,000 U.S. patents has value for its clients, partners and other companies—including Facebook and Google—that have turned to IBM for access to patented inventions that will enable them to innovate and freely conduct their businesses.

"This acquisition of patents from IBM and licensing agreement provides us with greater intellectual property protection and gives us freedom of action to innovate on behalf of all those who use our service," said Ben Lee, legal director for Twitter, in a statement.

Patents are a critical link between enabling innovation and furthering IBM's ability to serve clients and strike patent and licensing deals with companies like Twitter. Investing in R&D and patents demonstrates and delivers a measurable return to IBM's business and shareholders. The patent agreement with Twitter is consistent with IBM's commitment to licensing access to its patents and intellectual property to other companies in order to encourage and enable innovation across many areas, such as semiconductors, software, systems and more. IBM's commitment to investing around $6 billion in R&D annually produces thousands of patented inventions each year. IBM received a record 6,809 U.S. patents in 2013.

"We are pleased to reach this agreement with Twitter because it illustrates the value of patented IBM inventions and demonstrates our commitment to licensing access to our broad patent portfolio. We look forward to a productive relationship with Twitter in the future," Ken King, general manager of intellectual property for IBM, said in a statement.

Over past 5 years (2009-2013), IBM generated more than $5 billion in intellectual property income—a fundamental part of the company's strategy and one of the financial benefits of its consistent investment in R&D.

For instance, in July 2011, Google acquired more than 1,000 patents from IBM in a move to bolster its patent portfolio as the search giant girds for battle over Android. The SEO by the Sea blog initially reported that Google recorded the assignment of 1,029 granted patents from IBM covering a range of topics, including relational databases, object-oriented programming and business processes. The patents also cover a range of things, from "the fabrication and architecture of memory and microprocessing chips, to other areas of computer architecture, including servers and routers as well," said Bill Slawski, author of the SEO by the Sea blog.

Twitter Buys 900 IBM Patents in Cross-License Agreement

A strong patent portfolio has become almost a necessity in today's litigious technology business. IBM is at the top of the list again with a record-setting 6,809 patents, continuing a dominance that has lasted 21 straight years. With its patents up 5 percent from the previous year, IBM maintains a comfortable lead of more than 2,000 patents over the closest contender, number 2 Samsung Electronics. Canon, at number 3, increased its count by 20 percent from 2012, but the fastest mover in the top 10 was San Diego-based Qualcomm, making its debut at number 9, up 62 percent from 2012. The third American company in the upper echelon, Microsoft moved up to number 5, edging out Panasonic and just behind Sony.

Meanwhile, among the Silicon Valley crowd, Google and Apple continue to move up as both companies broke into the top 20 for the first time in 2013, with Google, at number 11, beating number 13 Apple for the second year in a row. These two new-school companies have now pushed slightly ahead of two old-school U.S. companies, number 14 GE and number 15 GM. What may be more significant is that this new tally dethrones Hewlett-Packard and Intel as the longtime Silicon Valley patent leaders. Intel, at number 18, also displaces number 19 HP, which had been number 15 and ahead of Intel in 2012.

"Not only are the number of patents increasing but the number of assignees increased this year by more than 4,000," Mike Baycroft, CEO, IFI CLAIMS Patent Services, which tracks patent rankings, said in a statement. "If we look at all the nearly 60,000 assignees, only 62 grew by more than 500 patents and only 640 grew by more than 50, and that 1 percent contributed more than 40 percent of total new grants. What that indicates is a tremendous amount of activity in the development of small patent portfolios. Are we starting to see signs that innovation is returning to the garage?"

IBM's 2013 patent total exceeded the combined totals of Amazon, Google, EMC, Hewlett-Packard, Intel, Oracle/Sun and Symantec. In 2012, IBM had 6,478 patents and Google had 1,151 and ranked number 21 among patent holders. In 2011, IBM had 6,180 patents and Google was not even listed among the top 50 patent holders. Twitter did not make the top 50 in either year.

IBM's culture of innovation encourages employees to invent and seek patent protection for their creations, which positions the company to lead in new and strategic areas such as cloud computing. The company currently holds about 1,560 cloud computing patents.

Patented IBM inventions from 2013 are already enabling many significant innovations, such as Watson, big data analytics software and cloud computing. IBM also holds fundamental patents for inventions that will usher in the emerging era of cognitive computing in which computers will learn, reason and interact with people in more natural ways.